Legitimacy, autonomy and trust: a recipe for organizations to operate in the public interest

PurposeThis study aims to examine the effect of publics' legitimacy evaluations on Arthur W. Page's conceptualization of “reasonable freedom of action” by breaking it into two parts: (1) perceived organizational autonomy and (2) trust in the organization.Design/methodology/approachThis study conducted an online experiment using a 2 (legitimacy: low, high) × 2 (legitimacy type: institutional, actional) between-subjects design. Measured variables included perceived organizational autonomy and trust.FindingsOrganizations acting in their own self-interest while ignoring community norms and expectations were perceived to be exercising higher levels of organizational autonomy and have lower levels of trust. The interaction between legitimacy type and level had an effect on perceived organizational autonomy and trust.Research limitations/implicationsPublic's view their relationships with organizations from a perspective that prioritizes responsibility and conformity to community norms and expectations. Also, organizations have more to lose by acting in their own self-interest to resolve institutional legitimacy concerns and more to gain by handling them in a way that includes the public interest than when they are managing an actional legitimacy situation.Practical implicationsSocietal norms, values and beliefs, which may have accommodated, or even supported, an organization's approach to doing business in the past, can change over time, calling into question an organization's legitimacy and its ability to operate in the public interest. As a result, organizational leaders need the Chief Communication Officer to help them understand current societal norms, values and beliefs.Originality/valueThis study addresses a core assumption of the organization–public relationship paradigm that has not yet been studied empirically. It also expands the understanding of organizational autonomy from a public perspective and examines the effect of legitimacy on organizational autonomy and trust.

Commentary—A Dimon in the Rough: Apologetic Crisis Management at JPMorgan Chase

When companies are caught in a crisis, the need to deliver a defense in order to salvage their damaged reputation is an ongoing challenge. Drawing from actional legitimacy and apologia theory, this article examines corporate use of crisis communication through a case study surrounding Jamie Dimon, CEO at JPMorgan Chase. Dimon found himself in a crisis from 2012 to 2013 when a so-called “London Whale” made a series of trades that cost the company $6 billion U. S. Dollars, and raised serious questions over Dimon’s judgment and ability to lead JPMorgan Chase. In particular, we argue that the restoration of actional legitimacy centers around strategies of mortification, (corrective) action, justification, and authorization.

Legitimizing private legal systems through CSR communication: a Walmart case study

Purpose The purpose of this paper is to understand the role of corporate social responsibility (CSR) communications in business by merging previously unconnected lines of thought in communications and law. Using Walmart as an example, the study shows that CSR communication can legitimize a corporation’s autonomous legal system of regulation and governance over its business practices. Design/methodology/approach A qualitative case study of all online corporate communications webpages from Walmart was examined. Discourse and qualitative analyses were used to show how language and online communications practices created actional legitimacy for Walmart’s CSR practices. Findings Using the UN’s Guiding Principles for Business as a framework for analysis, the study demonstrated how CSR communications helps Walmart to establish its own system of CSR norms, structures and remediation processes for its business outside of the state. These communications also sought to legitimize these actions among stakeholders. Research limitations/implications This case study looks at one corporation (Walmart) to illustrate a new connection between CSR communication and legitimacy. Future research in communications can extend this line of inquiry by examining how communications can reinforce autonomous legal systems and public perceptions. Originality/value Backer’s (2007) autonomous legal system and the concept of actional legitimacy in communications have not yet been studied systematically. This case study demonstrates how CSR communications can legitimize a multinational corporation’s business practices, which, in turn, raises ethical considerations for the ways this communication serves the greater society.